LONDON — Royal Dutch/Shell Group and BASF AG of Germany agreed to sell their joint plastics venture — a giant manufacturer of basic materials used in everything from diapers to auto parts — to a consortium led by New York-based Access Industries and Chatterjee Group of India for €4.4 billion ($5.7 billion), including debt.

The transaction is subject to approval by regulators and is expected to close in the second half of 2005.

The two companies established the joint venture, Basell NV, as an independent company in 2000 to consolidate their polyolefins businesses across the world. They said Basell has achieved competitive advantages such as cost leadership through world-scale plants, and has developed into one of the world leaders in its industry.

Dr. John Feldmann, member of the board of directors at BASF and chairman of Basell’s supervisory board, said: “The strategic divestment will now create additional value for the BASF Group as part of the company’s ongoing portfolio management. In its Plastics segment, BASF will continue to focus its strategic position on styrenics, performance polymers, polyurethanes and their related value chains.”

Fran Keeth, executive vice president of Shell Chemicals said, “the divestment enables Shell to optimize shareholder value and focus on our strategy of leveraging the synergies between oil products and chemicals activities, to strengthen our core portfolio in Europe and North America, and to grow in Asia and the Middle East.”

Chatterjee Group is an investment partnership run by Purnendu Chatterjee, a West Bangal native who has invested in Haldia Petrochemicals, based in Calcutta, and serves as deputy chairman of the company. Access Industries is run by Leonard Blavatnik, a Russian-born billionaire who made his fortune in the Russian oil industry.

Dr. Chatterjee praised Basell’s “broad-based customer portfolio, premium market position and leading capability in product and process innovation. We look forward to consolidating Basell’s global leadership position through enhanced commitments in technology.”

Basell has manufacturing operations on five continents and sells to more than 4,000 customers in more than 120 countries. The joint venture doesn’t disclose financial details, though it says it has annual revenue of €6.7 billion.

The move comes as demand in the heavily cyclical plastics industry has increased amid a rise in world-wide manufacturing activity. At the same time, rising energy prices — particularly for natural gas, a common plastics feedstock — have put cost pressure on plastics makers. Many of them have successfully passed those costs on to their customers. In April, Basell increased prices by €70 a metric ton on polypropylene and polyethylene grades sold in Europe, citing higher raw materials and energy prices.

Based in Hoofddorp, the Netherlands, Basell is the world’s largest producer of polypropylene, a material used in making bottles, food and beverage packaging, grocery bags and toys, among other things. The company’s products also are finding a growing market in the auto-parts industry.

Haldia Petrochemical also makes polypropylene and polyethylene, Basell’s two main products. The company has plants in Chennai, Delhi and Bombay. The firm is closely held by West Bengal Industrial Development Corp., Chatterjee Group and Tata Group, one of India’s largest conglomerates with $14.25 billion in annual revenue.

Shell and BASF said in July they planned to find a buyer for the Basell joint venture. The move is part of Shell’s vow to sell as much as $12 billion of noncore businesses in the next three years.

For instance, Shell and partner Bechtel Group Inc. of San Francisco recently agreed to sell most of their InterGen NV power-plant business to the private-equity arms of New York insurer American International Group Inc. and the Ontario Teachers’ Pension Plan for $1.75 billion. Shell also is in the process of selling its British liquefied-petroleum-gas unit.

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singapore love: Rumor on the street is the Shell Vito project is over a year behind schedule, AND Shell plans to double down and award Whale to the same contractors in the coming weeks.
Must be some serious love going on between the Singaporeans and Shell decision makers....

Bonus Group: To uscitizen,
BRAZIL:
'PS - Shell is investing 2 billion a year into Brazil and already paying off'. Assuming $2Bn (you did not quote currency), that would just about cover Shell's share of the costs of replicants, operating expenses and of course managers' BONUSES!
$2Bn would represent approximately 10% of Shell's income in 2018.
https://reports.shell.com/annual-report/2018/consolidated-financial-statements/statement-of-cash-flows.php
FPSO unit cost: our initial case ($91bn total capex) assumed a cost of $2.5 billion for each of 13 FPSO units. However, our research shows a wide range of possibilities for this cost depending on the vessel configuration; plus the fact that Brazilian shipyards should get better at building them so the cost could reduce over time. Also the project might choose to lease rather than buy the FPSOs outright, which could improve economics for the consortium depending on the lease terms.
http://openoil.net/wp/wp-content/uploads/2016/12/OO_br_Libra_narrative_1.0_161104.pdf

uscitizen: Bonus group, Contradict myself - lol. Poor guy - like I said do your own research - tell us what you find, you will look like the irrational uneducated poster you are. PS - Shell is investing 2 billion a year into Brazil and already paying off. Do you ever look anything up?

Bonus Group: To US Citizen. Thank you for your post of September 9th 2019 20:12. Congratulations on also being an avid reader of this blog. You are correct in my post of June 26th 2019 23:05 I did say that '..Shell had a ‘fire sale’ of a plethora of BG ‘dross’ assets in order to raise $30Bn to disguise the amount by which they had overpaid for BG Group.' More correctly, Shell had a ‘fire sale’ including a plethora of BG ‘dross’ assets in order to raise $30Bn to disguise the amount by which they had overpaid for BG Group. This does not detract from the fact that Shell did have a 'fire sale' in order to raise $30Bn. By my estimation Shell over paid for BG Group by about 30%. The Christmas boxes were very large, but the presents were very small. You contradict yourself when you say that you will not do my homework for me, but then tell me that the split of the $30Bn assets sold was 80:20 Shell:BG. Is that correct? If so, thank you that just goes to show how worthless those BG assets were, but then that is what you can expect from a Cappuccino and Belgian chocolate lifestyle company. Any comments about what the Brazil Asset are up to these days?

uscitizen: To Bonus Group - the large percentage of assets sold by Shell were non BG assets. I will not do your homework for you, but the split is 80/20. A great example of why you do not take what this sites protagonists post as good information. But go ahead, say I am wrong and also posting garbage, do your research and tell me the number of BG asset sales vs the 30 billion Shell raised thru asset sales.

John Donovan: MESSAGE FROM JOHN FOR THE ATTENTION OF BOGUS GROUP. I have received the information you kindly sent and have replied by encrypted email.

Bill Campbell Prelude Comment: I might write in more detail but I find it rather ironic that it was this website that was telling the world 6 or so years ago that this installation did not have risk levels as low as claimed and one of the principal risk drivers was the compact nature of a hazardous substances plant with not enough space to swing a cat in. Unless you are not aware I wrote to Shell Australia at the time giving them data from 8 existing or planned onshore LNG plants which varied from 80 to 100 hectares or on average 20 to 22 times the footprint of Prelude, could they tell me as a stakeholder with shares in the Company how they arrived at their ridiculously low number but can guess I assume that a reasonable explanatory reply was not forthcoming, as sure as eggs are eggs if this plant is currently having problems or if it has problems or major accident events in future it will be due to the force fitting a complex plant, with risk levels much above which they have published, on a postage stamp of a footprint.
God willing they will never live to regret their fraudulent overly optimistic claims, risk is based on reality not wishful thinking.
Bill

Thanks. Problem is that it's behind a paywall and despite it being a great publication for the oil industry, none of us retired folk wants to invest in a subscription.

FURTHER REPLY FROM JOHN

I have received the further Prelude information you have kindly provided and have replied by encripted email.

Bonus Group: Further to Bogus Group's post yesterday. I am absolutely appalled that a Senior Executive of Royal Dutch Shell plc should spout so much nonsense concerning the Prelude installation. The statement is redolent of Malcolm Brinded and his 'Touch F*ck All' policy, which led to the deaths of Keith Moncrieff and Sean McCue on Brent Bravo on 11th September 2003. What is boring is the continuous misleading spin and blather from the top of this company and their lackadaisical approach to safety. 'Chronic Unease' is a well known expression in the Oil and Gas Industry, and that state of mind is far from boring or routine. In fact nothing is either boring or routine in Oil and Gas operations. Rob Jager moved last year to the post of VP Prelude after spending thirteen years as Country Chair and VP for Shell New Zealand/Shell Taranaki, after Shell announced the sale of its New Zealand interests in March 2018. Jager clearly previously has spent too much time being 'laid back' in the fantasy land of Lord of the Rings, marvelling at New Zealand's scenery and wondering who will be entertaining him for his next luxury seafood dinner accompanied by a glass of chilled expensive New Zealand Sauvignon Blanc.

Bogus Group: PLEASE SEE REPLY FROM JOHN WHICH FOLLOWS THE COMMENT FROM BOGUS GROUP
More on Prelude article in Upstream.

I’m stunned by what can only be described as idiotic statements. Nothing like the utopia of self-aggrandisement without verification. What is Jagers’ level of technical and operational capabilities? I recall similar rhetoric from BG Group charlatans, with the “best in class” mentality and use of the most overstated expression ever to be used outside the education sector, all aimed at pleasing their taskmasters.
Ramp-up of Prelude and what Jager hopes will be decades of “uneventful” and “boring” operation.
“This will be a state where little or nothing happens. We have few if any alarms, no surprises and where things are running like clock work and we are effectively in autopilot,” he said.
“We will know when we have succeeded in this ambition because Prelude will be recognised as the most boring asset in Shell global portfolio our people will refer to it as the safest and most desirable place to work, and when the rest of the industry is knocking on our door to find out how we have achieved such a best in class outcome, especially for a facility as complex and unique as Prelude.”

REPLY FROM JOHN

Hello, I would be grateful if you could send me a copy of the article via [email protected] using an anonymous email address. I would pass it on to retired Shell EP experts for their assessment.

FG names Shell, Eni executives in $1bn bribery case – The Punch08 May 2019 11:43Google’Femi Asu with agency report
Royal Dutch Shell Plc and Eni SpA face additional corruption allegations over a Nigerian oil deal, after the Federal Government said in a London lawsuit that it believed a handful of executives, including Chief Executive …

FG names Shell, Eni executives in $1bn bribery case08 May 2019 08:09Punch Newspapers’Femi Asu with agency report
Royal Dutch Shell Plc and Eni SpA face additional corruption allegations over a Nigerian oil deal, after the Federal Government said in a London lawsuit that it believed a handful of executives, including Chief Executive …

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